KATHMANDU, June 21: The Department of Electricity Development (DoED) has scrapped over 150 survey licenses of hydropower projects having capacity of up to 1 megawatt (MW).
Some of the licenses date back to the early 1990s when the government opened power generation sector to the private sector for the first time.
Such survey licenses are valid for only three years and they are issued for the purpose of studying the feasibility of the project However, the license remained in the ownership of private firms or individuals. “We repeatedly published public notices, asking them to furnish progress report and apply for generation license. But no action was taken against them,” officials of the DoED say.
A notice posted on the department's website last week states that a total of 154 survey licenses have been terminated.
The department had started the process to scrap idle licenses in the first week of April, publishing a 35-day notice. Responding to the notice, three license holders applied for construction license, while two others filed application to upgrade their capacity. DoED is yet to respond on their applications.
“We couldn't give proper attention to the issue in the past as the projects were of small capacity. Now, we have decided to scrap idle licenses,” Nabin Raj Singh, the director general of DoED, told Republica. He also said that decision will pave the way for new investors to apply for survey licenses and discourage the trend of holding license without doing anything.
“Most of the licenses that we have scrapped were issued after the political change of 2006," informed Singh.
Many investors showed interest to invest in hydropower projects following the end of decade-long insurgency.
According to the department, license holders of Gandi Gad (1 MW) in Baitadi, Gulambi Khola (980 KW) in Gulmi and Hadikhola (997 KW) in Sindhupalchowk have applied for construction license. Likewise, license holders of Gwang Khola (Dolakha) and Chyangdi Khola (Lamjung) have applied to upgrade their capacity to 3 MW and 5.1 MW, respectively. Both the projects had capacity below 1 MW when the survey license was issued.
DoED is yet to respond to their applications.
As DoED does not levy heavy penalty on license holders of projects below 1 MW compared to project having capacity of above 1 MW, the tendency of holding license is increasing. The department had scrapped survey license of dozen of projects five years ago due to their failure to pay increased license fees.
At that time, the department had increased licensing fee by up to 30 times depending on the project's capacity.
The department had published a notice to scrap survey license of idle projects having capacity below 1 MW four years ago as well. But no action was taken at that time, according to Singh.